Gateway Tunnel Work Stops, 1,000 Workers Sent Home as Federal Funds Withheld

Following an evening of strife between President Donald Trump and Senate Minority Leader Charles Schumer, work has officially stopped on New York’s Gateway Tunnel project after funding from the federal government was halted.

The withholding of federal funds from the U.S. Department of Transportation and granted by Congress prevented four major procurements from moving forward in an effort to replace 100-year-old Amtrak tunnels running beneath the Hudson River, the Gateway Development Commission (GDC) announced Friday.

It resulted in the immediate loss of approximately 1,000 jobs working on the estimated $16 billion tunnel-boring mission, which is also known as the Hudson Tunnel Project, according to the GDC.

A lawsuit is underway to unlock the funding. That suit was scheduled to go before a judge Friday, according to Politico.

“For more than two years, the hardworking men and women building the Hudson Tunnel Project have not missed a day of work,” GDC CEO Tom Prendergast said in a statement. “That changes today, because the federal administration continues to withhold funding for this vital investment in our nation’s rail infrastructure. After spending more than $1 billion, and countless hours of hard work on this project, we will be left with empty construction sites in New York and New Jersey.”

The GDC expressed concern for the integrity of the 116-year-old North River Tunnel, which it says has been a source of transit delays. Despite those concerns, workers were sent home Friday.

The Trump administration did not immediately respond to a request for comment.

On Thursday night, Trump told Schumer that funding would be restored if he agreed to rename New York City’s Pennsylvania Station and Washington, D.C.’s Dulles Airport after the president.

Fights over transportation funding in New York and New Jersey have caused friction between the administration and representatives of the two states since Trump re-entered office at the beginning of 2025, with a battle for ​​$18 billion being held hostage by the White House over the summer and autumn months.

Up to $300 million of that funding would go toward the Second Avenue Subway extension, which would extend subways lines from East 96th Street to East 125th Street.

During that time, the Trump administration claimed that the state’s emphasis on awarding contracts with priority to businesses owned by women and minorities was a violation of civil rights laws.

Mark Hallum can be reached at mhallum@commercialobserver.com.